Crude's losses piled up and stocks slid into the red after the Conference Board said that its index of consumer confidence fell to 46.6 in July from 49.3 in June, a bigger decline than analysts were expecting.

Alan Valdes, a floor trader at the New York Stock Exchange for the brokerage Hilliard Lyons, said that the initial shock over the data was short-lived and that there was little else to get the market going either way.

"You have some guys doing some rebalancing going into the end of the month," he said. "But aside from that, the next big thing we're looking at is how the back-to-school season goes" as an indicator of whether consumption will be strong enough to sustain a late-year recovery in the broader economy.

The Dow had risen in 10 of the last 11 full trading sessions and is up nearly 8% this month. Investment managers have begun to make slight changes in their allocation strategies after those gains.

Rick Lake, a portfolio manager for the Aston/Lake Partners LASSO Alternatives Fund, said he's shifting his cash mostly to managers with the ability to be both long and short in the market, as opposed to long-only shops. While he still has an overall bias to long strategies, he's concerned about the rally's sustainability.

"The recent rally provided an opportunity for manic relief, where investors who were afraid of the downside were able to enjoy a moment of speculative upside," Mr. Lake said. "But this brief manic episode is coming to close."

The S&P 500 fell 2.56 points, or 0.3%, to 979.62, led by declines of more than 1% in its energy and utilities sectors. BP saw its shares slide 2.6% after posting a 53% drop in profit. Valero EnergyVLO2.77% fell 2.4% after booking a second-quarter loss as a strategy to process heavier grades of crude backfired amid falling sales volume and prices.

Oil futures settled down $1.15 at $67.25 a barrel in New York, snapping a three-day winning streak in which the commodity has leapt by nearly 5%.

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